THE pound remained flat as markets gear up for the outcome of Theresa May's coalition deal with the DUP and the start of Brexit talks.

Sterling lifted slightly against the euro to 1.446 and against the US dollar to 1.28 on Friday morning.

Britain's currency was yesterday boosted after the Bank of England signalled it could raise interest rates sooner rather than later.

However, the focus today is back to Brexit talks, which start on Monday 19th June and how Theresa May's deal with the DUP will affect the negotiations.

The Conservative leader is still trying to thrash out the terms of a coalition with the party, with the Queen's speech, which signals the state opening of parliament now delayed by two days until Wednesday June 21.

Former UKIP Leader Nigel Farage has expressed his fury at Prime Minister Theresa May over the general election, saying that it has now led to a backslide on Brexit.

Naeem Aslam, chief market analyst at Think Markets, said: "Theresa May is still trying to put all the broken pieces together and forming a coalition with Northern DUP party remains on top of the bucket list.

"The deal she is brokering with the DUP party could include that the UK would not be required to stay in the EU single market, which means that she is trying to establish a stronger position in a relative perspective before she ignites the negotiation process next week."

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The FTSE 100 also climbed in morning trading, after it was it by the Bank of England's surprise split among the Monetary Policy Comittee.

Michael Hewson, chief market analyst at CMC Markets UK, said: "With political uncertainty still rippling through UK markets and economic data coming in on the weak side, the Bank of England caught everyone on the hop yesterday despite its decision to keep interest rate policy unchanged.

"The consensus expectation was for an almost unanimous decision to keep rates unchanged, however in an unexpected development we got a significant split open up amongst policymakers about whether to hold or whether to hike rates.

"As a result of this unexpected turn of events the FTSE250 underwent one of its worst one day fall since last year’s Brexit referendum, sliding back sharply, with the FTSE100 following suit on a day when equity markets across Europe also slid back."